Nis­san to buy back $3.5 bil­lion in shares to boost value

TOKYO: Nis­san Mo­tor Co., boost­ing earn­ings on ris­ing sales in the U. S. and China, will ac­quire up to 400 bil­lion yen ($3.5 bil­lion) of stock in a bid to shore up its share price af­ter a 24 per­cent de­cline this year. The Ja­panese au­tomaker will buy back as many as 300 mil­lion shares, or 6.7 per­cent of is­sued stock, it said in a Tokyo Stock Ex­change fil­ing Fri­day. The com­pany and al­liance part­ner Re­nault SA agreed that the French au­tomaker will sell shares in Nis­san, to main­tain its hold­ing at 43.4 per­cent, ac­cord­ing to the fil­ing.

"Re­turn to share­hold­ers is one of Nis­san's key ob­jec­tives," Car­los Ghosn, chief ex­ec­u­tive of­fi­cer of both Nis­san and Re­nault, said in a state­ment. "We took this de­ci­sion con­sid­er­ing our fi­nan­cial sta­tus and out­look to con­tin­u­ously gen­er­ate sig­nif­i­cant free cash flow." Nis­san's de­ci­sion to buy back shares comes two months af­ter the Ja­panese com­pany failed in its ef­fort to ac­ti­vate vot­ing rights in Re­nault. That pre­served France's sta­tus as hav­ing more say in the al­liance than Nis­san. Af­ter adding ca­pac­ity in China, Mex­ico, Brazil and Thai­land in the past few years, Ja­pan's se­cond-big­gest car­maker doesn't have press­ing in­vest­ment needs, which frees up cash to buy back shares, ac­cord­ing to Ashvin Cho­tai, man­ag­ing di­rec­tor of In­tel­li­gence Au­to­mo­tive Asia in Lon­don. Nis­san had 860 bil­lion yen of cash and short-term in­vest­ments as of Dec. 31, ac­cord­ing to data com­piled by Bloomberg.